Home sales declined in California in November, suffering from diminishing housing affordability in the face of rising home prices and interest rates.  The California Association of Realtors (C.A.R.) reported it was the fourth straight month of declining sales.

Statewide sales of existing, single-family detached homes were at a seasonally adjusted annualized rate of 387,520 units in November.  This was a 3.4 percent decrease from a revised pace of 401,000 units in October and was 12 percent below the November 2012 rate of 440,250 units.  C.A.R. said the recent number was the lowest rate of sales for California since July 2010. 

The median price for an existing single-family home in California also slipped, down 1.2 percent from October's median price of $427,290 to $422,210.  Still the November price reflects a 22.2 percent run-up in a year.  The increase, from a median of $345,560 in November 2012 represented the 17^th month California home prices have increased by double digits from a year earlier.

"Sales reached their highest level in the fourth quarter of 2012, when mortgage rates bottomed out last November.  While diminishing housing affordability played a big role in the larger than expected decrease in home sales this November, exceptionally strong sales last year was another factor for the double-digit year-to-year decline," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  "The demand for housing could remain soft in the upcoming months as buyers and sellers continue to search for a level playing field in the market."   

"Improving home prices are a double-edged sword for the housing market.  While welcomed news for homeowners and prospective sellers, diminished affordability is squeezing out many buyers and dampening their enthusiasm for home purchasing," said 2014 C.A.R. President Kevin Brown. "Buyers are playing the waiting game and putting their home search on hold until prices stabilize and more inventory becomes available in the market."

The inventory of available single-family homes edged up to a 3.6 month supply from 3.4 months in October and 3 months one year earlier.  A six- to seven-month supply is considered typical in a normal market.  Marketing time increased slightly in November from 33.1 days to 36.7 days, one day less than the previous November. 

C.A.R. collects sales and price data through a survey of 90 member associations throughout the state.  Due to the low sales volume in some areas, median price changes may exhibit unusual fluctuation.  C.A.R. cautions that the change in median prices should not be construed as actual price changes in specific homes.